Income tax slabs are the income bands and the rate charged on each band. For FY 2026-27, India runs two systems: the new regime (the default) with lower rates and a nil band up to ₹4 lakh, and the old regime (opt-in) starting at ₹2.5 lakh but keeping deductions the new regime drops. Neither is universally cheaper. The answer depends on your income and the deductions you actually claim.
Slabs are marginal. A higher rate applies only to the income inside that band, not to your whole salary. Crossing into the 30% band does not tax your entire income at 30%.
FY 2026-27 at a glance
What are the new regime tax slabs for FY 2026-27?
The new regime is the default. If you make no valid choice to use the old regime, this is how your tax is worked out. These rates apply to taxable income after permitted deductions, including the ₹75,000 standard deduction for eligible salary and pension income.
| Taxable income (FY 2026-27) | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001–₹8,00,000 | 5% |
| ₹8,00,001–₹12,00,000 | 10% |
| ₹12,00,001–₹16,00,000 | 15% |
| ₹16,00,001–₹20,00,000 | 20% |
| ₹20,00,001–₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
A 4% health and education cess, levied through the annual Finance Act, applies on the tax, and a surcharge is added at higher incomes. The individual rebate commonly searched as “Section 87A” makes the tax nil for eligible new-regime taxable income up to ₹12 lakh, with marginal relief just above that threshold. The section label comes from the 1961 Act; tax year 2026-27 uses the corresponding provision of the 2025 Act.
What are the old regime tax slabs?
The old regime is now opt-in. Its rates are higher, but it retains the exemptions and deductions that the new regime removes: 80C, 80D, HRA, home-loan interest and others. Salaried taxpayers get a ₹50,000 standard deduction here.
| Taxable income (FY 2026-27, under 60) | Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001–₹5,00,000 | 5% |
| ₹5,00,001–₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Senior citizens (60 and above) get a higher nil band, and the very elderly (80 and above) higher still. The 87A rebate under the old regime covers taxable income only up to ₹5 lakh. The same 4% cess and surcharge structure applies.
Which regime is the default, and can you switch?
Since FY 2023-24 the new regime is the default, a switch made by the Finance Act 2023. The old regime is a choice you make. Salaried taxpayers can generally pick between the two each year at filing; people with business income face tighter switching rules. Because the choice resets annually for most salaried filers, it is worth re-checking as your income and deductions change.
What about surcharge and cess?
The slab rate is not quite the final number. A 4% health and education cess is added on top of the tax under both regimes. On higher incomes, a surcharge also applies, rising in steps as taxable income climbs past set thresholds; the new regime caps its top surcharge rate below the old regime's highest tier. For most taxpayers the cess is the only add-on that bites, but anyone in the upper income bands should account for surcharge when comparing the two systems. These rates, like the slabs, are enacted by Parliament through each year's Finance Act and can change.
How do the two regimes actually compare?
They pull in opposite directions. The new regime gives you lower rates and a broad nil band but strips out almost every deduction. The old regime charges more per band but lets you shrink taxable income through 80C, HRA and the rest.
New regime (default)
- Lower slab rates, nil up to ₹4 lakh
- ₹75,000 standard deduction for eligible salary and pension income
- Nil tax up to ₹12 lakh via the rebate, subject to its conditions
- Most exemptions and deductions removed
Old regime (opt-in)
- Higher rates, nil up to ₹2.5 lakh for individuals below 60
- ₹50,000 standard deduction for eligible salary and pension income
- 87A rebate up to ₹5 lakh, subject to its conditions
- Keeps eligible claims such as 80C, 80D and HRA
Which one produces the lower bill is arithmetic, not opinion. Someone with large 80C and HRA claims may land lower under the old regime; someone with few deductions often lands lower under the new one. The old vs new regime calculator runs both on your actual figures.
Official sources
- Income Tax Department ITR-2 help: slab rates and rebate FAQ
- Finance Bill 2026 explanatory memorandum
- Income Tax Department: transition to the Income-tax Act, 2025
Related nyvo guides
- Income-Tax Slabs Reference Table shows both regimes' bands, standard deductions and the Section 87A threshold in one dated, source-linked table.
- Old vs New Tax Regime: How They Differ runs the full comparison of the two systems, and how to tell which costs you less.
- Section 87A Rebate: How the Zero-Tax Threshold Works explains why new-regime tax is nil up to ₹12 lakh even though the slabs still apply.
- Section 80C: The ₹1.5 Lakh Deduction Explained, the deduction most people weigh when comparing the two systems.
Slabs are just the frame. The rate you see is not the tax you pay until you factor in the regime, the deductions and the rebate. For FY 2026-27, start from the default and compare. The tables above are a snapshot, not the whole calculation.
